Gold Price Forecast: XAU/USD’s upside hinges on Fed and NFP
|Gold price registered gains in the first three days of the last week. However, the yellow metal lost its traction and erased its gains to close the week virtually unchanged. The Federal Reserve's (Fed) policy announcements and January jobs report this week could help investors decide whether the XAU/USD's bullish rally has more legs.
Fed policy announcements and US January jobs report could ramp up volatility
“The Fed is widely expected to raise its policy rate by 25 bps to the range of 4.5-4.75%. In case Powell continues to push back against the 'Fed pivot' narrative and tries to convince markets that they have no plans of cutting the policy rate before 2024, US T-bond yields could edge higher and weigh on XAU/USD. However, investors are unlikely to bet on a steady USD rebound before seeing the employment and inflation figures for January.”
“On the last trading day of the week, the wage inflation of the labour market data could influence the US Dollar's valuation. If the data reveals a further softening of wage inflation in January, the greenback could come under selling pressure and help XAU/USD push higher.”
“Finally, the Prices Paid sub-index of the ISM's PMI report will be watched closely. The component is expected to decline to 65.5 from 67.6 in December. A lower-than-consensus print should hurt the USD and provide a boost to XAU/USD and vice versa.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.